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CapitaLand Commercial Trust (CCT) is set to become the sole owner of the 40-storey office tower CapitaGreen (pictured), following its announcement in an SGX filing on Monday (23 May) that it will acquire the remaining 60 percent interest it does not already own in the office tower for S$393 million.
CCT will acquire a 50 percent share from CapitaLand, and the remaining 10 percent share from Mitsubishi Estate Asia Pte Ltd (MEA).
The acquisition will be funded will be financed through borrowings from committed bank facilities, the trust said.
Based on the average of two valuations by two independent valuers, the property has a market value of S$1.6 billion or S$2,276 per sq ft, compared to a total development cost of S$1.3 billion, CapitaLand said in a separate press release.
It added that CCT will exercise a call option to acquire the stakes.
The call option is part of a joint venture agreement signed in 2011 and is conditional on market valuation being equal to or above the hurdle price of S$1.59 billion, CapitaLand said.
“We expect the proposed acquisition to be accretive to the Trust’s distribution per unit (DPU),” said Lynette Leong, CEO of CCT’s manager, CapitaLand Commercial Trust Management Limited.
She also noted that if the acquisition of the 60 percent stake had been completed on 1 January 2016, CCT’s distribution per unit for Q1 2016 would have risen by 1.4 percent to 2.22 cents from the reported 2.19 cents. The property’s contribution to the net property income would have also increased by 14 percent from 6 percent previously, she added.
Meanwhile, according to CapitaLand, it will make a profit of about S$196 million from the sale of its stake.
Located at 138 Market Street in Raffles Place, CapitaGreen is a Grade A office building that has a net lettable area of about 703,000 sq ft. The development was completed in December 2014 and has 92.8 percent occupancy rate as of 31 March.
Nikki De Guzman, Editor at CommercialGuru, wrote this story. To contact her about this or other stories email nikki@propertyguru.com.sg
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